KARACHI: The International MonetaryFund (IMF) focused technical-level discussions on Pakistan’s external financing outlook, particularly the status of the UAE’s $2 billion rollover and the issuance of Panda bonds, and questioned how the tax authority would meet the revised revenue target in the remaining months of the current fiscal year, according to a news report.
During the virtual talks on Tuesday, the FBR informed the IMF that it expects tax collection to reach around Rs13,500 billion by the end of FY2025-26, compared with the revised annual target of Rs13,979 billion.
IMF officials questioned the projection and asked how the tax authority would raise revenues beyond Rs13,000 billion during the remaining months of the fiscal year.
The FBR previously had a target of Rs14,130 billion approved by parliament at the time of the federal budget. That target was later revised downward to Rs13,979 billion. IMF officials are currently estimating that revenue collection may remain in the range of Rs13,000 billion to Rs13,200 billion.
According to officials, if revenue collection falls below the revised target, the Ministry of Finance may have to reduce expenditures to maintain the fiscal deficit target and the primary surplus goal of 2.4% of GDP by the end of June 2026.
The tax authority has set a collection target of Rs1,366 billion for March 2026 and will need to exceed Rs1,300 billion during the month to remain close to its projected annual total.
Officials informed the IMF that tax collection during the first eight months of FY26 fell short by about Rs428 billion compared with the target. The FBR expects to recover part of the shortfall during the remaining four months of the fiscal year.
Discussions also covered Pakistan’s external financing requirements. Finance ministry officials briefed the IMF on rollover arrangements with friendly countries and expected disbursements from multilateral and bilateral lenders during the fiscal year.
The IMF asked about the status of a $2 billion deposit rollover from the United Arab Emirates. Officials said negotiations with UAE authorities are continuing and that Pakistan is seeking at least a one-year extension.
Officials also informed the IMF that multilateral and bilateral loan disbursements are proceeding as planned. Regarding China, Pakistan recently repaid a commercial loan with the expectation that it will be refinanced within the current fiscal year.
Authorities indicated that there are no plans to issue Eurobond or Sukuk instruments during FY26. The IMF also sought an update on the planned Panda bond, which has been delayed for several months.
